As set out in the recently published Finance Bill 2017, from 1 April 2017 the Government is implementing a number of changes relating to the VAT zero-rating for the purchase of adapted motor vehicles for eligible disabled users.

Following this, HMRC has published VAT Notice 1002: adapted motor vehicles for disabled people and charities. The notice explains:

• what motor vehicles can be zero-rated for VAT
• how the motor vehicle needs to be adapted to be zero-rated
• who is eligible to buy a motor vehicle at the zero-rate of VAT
• what evidence is needed to support the eligibility for the zero rating of these supplies

Changes to the legislation, to be applied from 1 April 2017, are:

• the introduction of a limit on the number of vehicles that can be purchased under the relief, with an eligible individual now being able to purchase only one vehicle that meets the qualifying conditions every 3 years
• making customer eligibility declaration forms mandatory
• making it mandatory for suppliers to send HMRC information about their zero-rate supplies
• the introduction of a penalty that will apply to any person that provides an incorrect customer eligibility declaration form

HMRC has also published two forms, replacing forms VAT1615 and VAT 1616, for the correct application of this zero rating:

• VAT1615A, for customers (users, charities or other eligible bodies) to claim relief from VAT
• VAT1617A, for suppliers to provide information about supplies made